Sunday, September 7, 2014


Keybot the Quant remains short moving into the new week of trading. Friday was an erratic over 17-handle intraday recovery move from SPX 1990 to 2008. Tomorrow morning we find out if the bulls continue the party, or not. The algo is champing at the bit to go long, albeit by one thin point difference between the algo number and signal line, and waiting for all the necessary parameters to latch. If the SPX moves any amount higher at the opening bell and holds the highs for several minutes, Keybot will likely flip long and take a loss on the current trade. The bulls need to see a slow move higher in the SPX to claim victory since a gap-up at the opening bell may trigger a timer that will delay the flip to the long side for about 90 minutes.

Volatility and copper continue to dictate market direction. Watch VIX 12.46 (now at 12.09 and created the bull juice on Friday) and JJC 38.71 (now at 38.47 creating market negativity). If VIX moves above 12.46, the bears are back on easy street and the stock market will track lower. If JJC moves above 38.71, this is the go-signal for the bulls and verifies lots more market upside ahead and the SPX will target the 2020's.

For the SPX starting at 2008, the bulls need any smidge of green in the Sunday overnight futures and the upside market orgy will continue full speed ahead with the SPX running to 2015 and higher. The bears need to push the SPX under the strong 1990-1991 support to regain their mojo, a formidable task, so instead bears will focus on keeping copper negative and pushing volatility higher. A move through 1992-2007 is sideways action to begin the new week. Keybot prints one pre-scheduled number this week on Friday morning. The bulls appear ready to take control again. The first hour of trading on Monday will be key. Watch the S&P futures overnight and copper trading since they will tell you the answer forward.

9/14/14; 7:00 PM EST =
9/12/14; 10:00 AM EST =
9/7/14; 7:00 PM EST = +54; signal line is +53 but algorithm remains short
9/5/14; 12:36 PM EST = +54; signal line is +53 but algorithm remains short

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